Jun 25, 2016

The United Kingdon Exits


One of the reasons that Europe was not so successful as the US was that each country had its own borders, currency, army, customs, rules, laws.  It was a hassle to trade or move among countries, both as a businessman, a worker, or a tourist.

The gradual unification of Europe has been a great success story.  Many defended borders are no more, it is peaceful, and it is just as easy to travel from Germany to France as it is to travel from Illinois to Indiana.

Imagine the economic friction if we had that situation between our States in the United States. It would balkanize our economy and lives and reduce economic vitality and increase taxation to pay for the border.

I remember driving down a river valley on the border of Germany and Austria. The road went back and forth across the creek, each time crossing a border where custom agents checked our passports.  It was an absurd waste of money - congrats to the Europeans for getting rid of this.

And of course the huge standing armies with strongly defended borders between each country has been greatly reduced. Saves a lot of money.

For many years Europe has been moving towards currency, economic, and trade common markets. It has been uneven - a number of countries including England, Norway, Sweden, and Switzerland did not join the Eurozone for currency unification. And the UK and Ireland did not sign the Schengen agreement and thus kept their customs and passport controls.

Europe has been gradually increasing their integration. With the UK exit this process begins to unravel.  It will likely have negative impacts on the UK and Europe.

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I just crossed the border between Canada and the US. Took about 40 minutes. Certainly a bit of friction for trade. And must have negative impacts for the areas around the border.